Group II base stock providers are pushing new alternatives to fill the diminishing Group I supply, according to global analysts, Kline.
With Group I basestocks in decline as they become obsolete for automotive applications, the gap being left for non-automotive market is being filled by Group II suppliers who are pushing new alternatives, according the latest report from Kline.
Entitled Global Lubricants: Market Analysis and Assessment the report states that products such as naphthenics are being provided for metalworking fluids, process oils, and rubber oils. However, Kline states that their use in industrial application is unlikely to happen as quickly as the changes in automotive lubes because of significantly greater variable in industrial applications with smaller individual volumes.
Re-refining basestocks is becoming increasingly compelling because of higher prices, new European regulations and a positive North American attitude to re-refining. However, the positives are being countered by logistics issues and poor consumer uptake. But re-refined basestocks are still projected to grow at over six percent per year to exceed three million tonnes by 2021.
Esleswhere in the report, Kline states that global lubricant market growth in 2011 was two percent, largely driven by the BRIC countries’ resurgent industrial activity and commercial and passenger vehicles sales.
Despite being the largest lubricant market with nearly 22% global share, there US market continues its decline, with a league table of lubricant markets showing China and India in second and third place with a combined total of over 26%. Japan’s fourth place is about to be overtaken by Russia. Indonesia, South Africa and Malaysia are showing strong growth due particularly to industrial activity in the power-generation and oil and gas production sectors. New vehicle ownership and production and construction are other sources of this growth.
Amongst the producers, Shell still holds its lead with a 13% market share. It also leads in the branded lubricants category. Its OEM relations continue to grow, especially with Chinese companies as well as successful promotion of product through service fill recommendation.
Shell’s sales in the US have improved and this remains their key market overall with Asia-Pacific region a key growth area. The company’s number one global position in 2011 is expected to be maintained as a result of their focus on brand and value-led segments. Number two in the market is ExxonMobil with a 10% market share followed by BP with seven percent.